Farmer heterogeneity and differential livelihood impacts of oil palm expansion among smallholders in Sumatra, Indonesia

Vijesh Krishna, Michael Euler, Hermanto Siregar, Zakky Fathoni and Matin Qaim

No 13, EFForTS Discussion Paper Series from University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)"

Abstract: The study examines the heterogeneous livelihood impacts of oil palm expansion among smallholder farmers in Jambi Province, Sumatra. Per-capita annual consumption expenditure (PACE) is chosen as a quantitative measure of livelihood status of farm-households. Its determinants are estimated using standard treatment-effect and endogenous switching regression models. After controlling for self-selection bias, adopters of oil palm are found increasing their PACE significantly in comparison to the counterfactual. On the other hand, most of the non-adopters are better-off without oil palm, presenting a strong case of comparative advantage. Differential consumption impacts of observed variables are evident across adoption and non-adoption regimes. In general, farm-households with higher opportunity cost of family labour benefit disproportionately more with oil palm adoption.

Keywords: adoption; agricultural development; endogenous switching; impact; Indonesia; farmer welfare (search for similar items in EconPapers)
JEL-codes: O12 O33 P36 Q12 R14 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-agr and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:crc990:13

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